Tax is taxing


               There has been a sudden surpising worry by some that the VAT rise in the UK in January will reduce growth next year. The official confirmation of this from the OBR should not be a great or new revelation.The point is the growth rate is unsustainable given the very  high level of borrowing, so if you do not bring the deficit down you could end up with a far worse outcome.  Of course a material tax rise  cuts what people can spend on other things. It is part of the price of trying to reduce  the inherited unacceptably high deficit. Whether you cut the deficit  by tax rises or by spending cuts, forecasters will say it  will reduce the growth rate of activity.Forecasters rarely offer you the alternative forecast, to show you what would happen if you do not tackle the deficit and you enter a Greek style crisis.

¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† ¬†The case for doing it has always been that if you do not cut the deficit, the deficit may¬†damage the economy more ¬†and overwhelm us all. If the UK lost¬†the confidence of world markets as overborrowed Greece and Ireland have done, much bigger cuts and tax rises would¬† be forced on us. Cutting the deficit is a necessary policy to prevent a worse economic outturn.If you keep a deficit which is too high interest rates are forced up, making many worse off. If your deficit loses you the confidence of the world’s money lenders the government could be forced to cut much more from public spending, as Greece and Ireland have discovered.

            Some tax rises can be self defeating. VAT is probably the least bad tax option. Hiking the rates of CGT, Income Tax and profits tax might result in less revenue being collected. It is all too easy to put people off enterprise. You can drive them or their profits and earnings abroad very quickly. Higher rates of Income Tax and CGT are more damaging to tax revenues and the rate of business investment and growth than higher VAT.

¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† Ireland is being lectured by her Euroland partners that she should increase her Corporation Tax rate to cut her deficit more. It is now popular to claim that all of Ireland’s real economic achievement prior to 2007 was false, and that all the policies which brought that about were wrong. It is true that in the later stages of Ireland’s great period of growth poor banking regulation led to too much credit, driving asset prices too high. It is also true that belonging to ¬†the Euro kept interest rates and the exchange rate at too easy a level for too long, making a credit explosion more likely.¬†¬†That ¬†has now replaced that with an exchange rate that is too high, limiting Ireland’s capacity to export her way out of debt. Not all the achieveement prior to 2007 was false, as a visit to Dublin will testify.

       The cuts in Corporation Tax were an excellent  policy, which did enormous good to Ireland. The low tax rate brought in many more international businesses, and with them much more revenue. Raising the rate too far from here could lose Ireland that advantage and could cut their revenues in the medium term, making the deficit worse. There is already a substantial outflow of people from Ireland seeking better oportunities elsewhere. An outflow of companies would add to the trouble.

¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† The UK’s strategy for cutting its deficit over four years has always relied on a large increase in tax revenue. Total public spending goes up every year over the next four years in cash terms, despite some difficult cuts in some areas. There is strong growth in spending on Overseas Aid and ¬†the EU, increased pension payments, and small real growth in Health and schools. By 2014-15 current ¬†spending will be up by ¬£92billion compared to last year, and tax revenue is forecast to be a massive ¬£176 billion higher.

¬†¬†¬†¬†¬†¬†¬†¬†¬† A higher rate of VAT is part of the that forecast. The OBR does not think the VAT increase so worrying that it stops growth. Most of the increase in tax revenue ¬†is expected to come from economic growth. That it makes it doubly important the rest of tax policy is geared to promoting growth. The Irish debate over Corporation Tax is instructive for us. Ireland’s Corporation Tax revenue surged after the cut the rate. The sooner the UK cuts her rate the better. The government has said¬†it will laser in on measures to promote growth. That will require a substantial¬†business freedom element to Mr Clegg’s Freedom ¬†bill soon. Further reductions in¬† tax rates on earning and investing, on working and enterprise, would also help, and could increase the revenues.


  1. lifelogic
    November 21, 2010

    Tax rates that are too high, as they are by some considerable margin, are entirely self defeating. Investment and business confidence in the future is needed urgently and lower tax rates for Corporation Tax, IHT, CGT Stamp duty & Income Tax would do this and raise more tax too. Also it would enhance the chance of winning the next election also very important for business confidence.

    Cameron clearly does not see this regrettably and is following Heath and Major towards the cliff.

    1. lifelogic
      November 21, 2010

      “The government has said it will laser in on measures to promote growth”

      I will believe that when I see it. So far all signs apart from the (only partial) HIP pack removal have been in entirely the opposite direction.

      1. lifelogic
        November 21, 2010

        Perhaps I misunderstood “laser in” . When you say ‚ÄúThe government has said it will laser in on measures to promote growth‚ÄĚ do they mean to laser zap to destruction these measures or to seek it out and amplify it for the benefit of all?

        So far I can only assume they meant the former or was it intentionally vague
        perhaps like Clinton’s “I did not have sexual relations” or William Hague’s “no more transfers of “areas” of power to the EU”.

  2. JimF
    November 21, 2010

    High Corporation Tax rates in the UK specifically prevent SME’s re-investing their profits. Write down allowances have also been reduced under this Government, posing an additional burden. This isn’t so important for small service companies, but it is critically important for manufacturing SME s, which will now only be able to write down 18% of plant and machinery, discouraging investment in these.

  3. Stuart Fairney
    November 21, 2010

    Thus the tories, keep spending and hope to God for increased tax revenue to cover it.


    Where as Labour would er, …spend yet more and hope to God for increased tax revenue to cover it.

    Time for a tea party methinks as the tories are completely sold out.

  4. ferdinand
    November 21, 2010

    I agree entirely but it is a hard task to persuade people who have yet to see the empirical evidence, let alone understand it, that cutting taxes can improve tax receipts.

  5. Acorn
    November 21, 2010

    Hands up all those companies that actually pay at the main rates of UK Corporation tax. The world is not full of tax lawyers for nothing.

    1. waramess
      November 21, 2010

      The problem Acorn is that tax lawyers are not only expensive but the solutions they deliver do not always work. Much easier in the long run to simply move the HQ somewhere else.
      From the revenues point of view, high tax rates mean they have to maintain a high level of inspection and the quality of their forcasting is substandard. Much easier for them to have a level of taxes that is not punative.
      So, if it is clear to the Revenue and clear to the taxpayer, why are the politicians so slow on the uptake?

    2. libertarian
      November 21, 2010


      All 5 of my companies do as do most of my business associates. So I’m not really sure what point you think you are trying to make.

      1. Acorn
        November 22, 2010

        My point is that a low published rates of tax with fewer discounts and exemptions, balanced against high rates with lots of exemptions and discounts. You will be aware that the more profit your businesses make, the more opportunities arise to lay off your liabilities for CT. Stuff like employee investment trusts etc.

        Some OECD stats at

    3. Stuart Fairney
      November 21, 2010

      If that’s all it was we would have some hope. I will not now be employing a graduate since a local council has demanded an additional ¬£20K from me as a planning contribution (to enact a EU directive which is pointless).

      Tax destroys jobs. If you tax something you get less of it.

  6. Alte Fritz
    November 21, 2010

    JimF is right to point to one significant disincentive to invest which hobbles manfacturing SMEs. Another overlooked point is the fact that income tax is now a voluntary tax for a significant portion of high earners thanks to numerous quite sophisticated remuneration maximising schemes. The attraction of these schemes is, of course, derived from high marginal tax rates.

    The left can be attacked for their insistence on high tax rates for their own sake when what matters is the amount of revenue raised. It is a song which cannnot be sung too loud.

    As for VAT, just as a 2.5 % reduction did not bring people on the streets to spend money on new goods and services, nor will a like increase deter them from buying what they want.

  7. Mark Wadsworth
    November 21, 2010

    “VAT is probably the least bad tax option.”

    Wrong. VAT is by far and away the most damaging tax.

    1. It distorts massively between VAT-able and non VAT-able businesses (which are mainly those related to banking and finance, or land, i.e. food and housing, i.e. those things that got us into this recession).

    2. Corp tax is a tax on the return on capital, but if you are making losses you pay nothing, so it does not eat into the capital itself. VAT has to be paid whether a business is profitable or not, so it eats into capital.

    3. VAT acts as a barrier to entry/barrier to growth for new and smaller businesses, because the £70,000 threshold means that a business with a turnover of £69,000 has to leap straight to a turnover of about £90,000 before it even catches up. Further, new businesses tend to make losses in the first couple of years, so it benefits incumbents, see point 2.

    4. As a simple matter of observation, VAT is largely borne by the producer, not by the consumer. Consumers cannot magic money out of thin air to pay 2.5% than they were doing before.

    5. One sign of competitive (i.e. efficient, i.e. successful) industries is where net profit margins on sales are very low (5% to 10% is about normal, across all businesses). So very profitable businesses earning more than 5% will become less profitable, marginal businesses with profit margins of 5% or less will be in the danger zone; and businesses in the danger zone, say 1% or 2% net profits will go banrupt.

    6. If you grind the figures, the knock on effect of trying to raise an extra £13 billion from VAT will be that corp tax receipts go down, PAYE receipts go down, unemployment and welfare costs go up. It is quite possible that incremental extra tax revenues minus additional welfare payments is so close to zero as to make this a very dangerous experiment indeed.

    7. VAT is imposed by the EU, and as a Tory MP, you might be aware that the EU wants all Member States to harmonise VAT at 20% – to pretend that this is to try and reduce the deficit (which is not going down under the Tories, I might add) is a bit feeble.

    8. If we are to try and tax ‘consumption’ rather than ‘production’, taxing the output of enterprise, labour and capital is NOT the way to do it. You have to try and identify something that has value, which people are prepared to pay for but which is not actually ‘produced’ in any meaningful way (and certainly not by individuals who can change their behaviour). So how about a tax on the ‘consumption’ of land? This cannot be created, destroyed or taken abroad, so all you’d be doing is replacing privately collected taxes (ground rents) with publicy collected taxes (Land Value Tax) and reducing publicly collected taxes on output, income and profits accordingly.

    1. APL
      November 22, 2010

      Mark W: “Wrong. VAT is by far and away the most damaging tax.”

      What he said.

      Mark W: ” as a Tory MP, you might be aware that the EU wants all Member States to harmonise VAT at 20% ‚Äď to pretend that this is to try and reduce the deficit (which is not going down under the Tories, I might add) is a bit feeble.”

      Mr Redwood is a Party aparatchnik masquerading as a right wing Tory. Party before country, like the rest of them.

      Reply: Nonsense. As you well know, I have proposed in the past spending reducitons to avoid any tax increases, which remains my preferred strategy.

    November 21, 2010

    Whilst away we noticed a piece by you after meeting party members whose view on the 6 months to date was summarised as ‘disappointing’.

    That was the general view too of the holidaying English folk with whom we discussed politics and ‘the state of play’. Too many backdowns on important issues thought to be fundamental to the party and too many far-off timescales on those that are to be implemented. The all-important early thrust has stalled and the PM, in particular, is being seduced by the adrenalin of strutting the world stage.
    We cannot see how the ‘big tough announcement’ from the summit that British combat troops would be out of Afghanistan by the end of 2015 is anything new – that’s FIVE whole years for heavens sake!
    We were the first on this site to condemn the stupidity of putting the photographer on the taxpayers wage bill rather than, as we said at the time, the party’s. Symptomatic of something bigger we thought and though belatedly corrected by No 10 we knew it would be remembered vividly by ordinary voters. It is and it will be.

    Our disappointment on Hague’s performance to date is prevalent but annoyance and anger are better descriptions of the attitude to all things EU so far. This will remain a big issue with the support of the braver Conservative MPs.
    You are right to support the principle of the VAT increase in this piece and we, and many others who thought they’d thrown off the shackles of New Labour after such a long struggle, now want to see more backbone at cabinet level.

  9. Nick
    November 21, 2010

    The question on the Irish issue is who has the power?

    UK banks nationalised by that (words left out) Gordon Brown are owed 90 billion. The German’s are owed 130 billion.

    ie. The Irish are in the driving seat. They have the option of pressing the nuclear button. Default.

    The question for the Irish is would they be better off with a default? The answer is yes. No debts, the ability to borrow at a lower rate than now (they don’t have debt so they can afford it) and lower debt payments.

    Not good for the Nationalised banks who lent money in a stupid way. Not good for the Germans, because the Greeks, the Portuguese will see that default is the sensible solution.

    1. lifelogic
      November 21, 2010

      Perhaps the Irish plan is to take the bail out loan first, spend it then default and devalue to a new currency later? Let us hope Cameron has not put much UK funds in to the hole.

  10. Andrew Gately
    November 21, 2010

    I think that the rise in VAT will mirror the reduction in VAT, price will not change as prices are set by markets not the cost of production.

    Just as business benefited from the reduction as margins increased they will be hit hardest by the rise as margins are reduced.

  11. oldtimer
    November 21, 2010

    It is curious how the current “narrative”, to borrow that over used word, talks about “cuts” when the reality is that everything is increasing – be it inflation, taxes, government spending, ECB bailouts, the national debt. Such is the Alice in Wonderland world created by the political class and its attendant media circus.

    The rest of us know better. Everything is going up – with the exception of our standard of living which really is being cut. Tax rates need to be cut too in order to increase tax revenues, as you rightly point out.

  12. electro-kevin
    November 21, 2010

    Expect more hidden inflation (as if we don’t have enough already)

    This will be done as manufacturers attempt to absorb the effects of added VAT and sneakily downsize/degrade the products they sell on to us.

    Have you ever wondered why light bulbs don’t last as long as they used to or why it now takes three broken matches before you get to the one that lights your fire ?

  13. Brigham
    November 21, 2010

    As a pensioner, the VAT increase will affect me substantially. I now use my car very little, and my bus pass a lot. If the times of the bus pass is put back I will go out later. The government will lose money from me, as I will buy less and less. On another matter, the cuts. We heard a lot about Quango cuts. Long lists were promulgated in the media, nothing has been heard since. Which ones have been cut and how much has been saved, or is it the usual trick of virtually just renaming them?

  14. alan jutson
    November 21, 2010

    The simple fact is that the OVERALL TAX RATES in this Country are TOO HIGH, so something will have to give, and give soon.

    At least with VAT there are some (but perhaps too few exemptions) so it does depend to a degree on what you spend (food thankfully is exempt as an example) but with Income Tax, National Insurance, Interest on Investment from Savings, it is actually taken before you get it.

    We simply have to get to a lower total Tax take, and get to a smaller Government spend, the alternative will eventually mean that the people with wealth and the ability to create it, will go elsewhere, as indeed they are starting to do.

    So much Government spending is wasted, that it simply borders on criminal maladministration by those who think they are in control, but really have not got a clue what they are doing.

    We seem over the past decades to now have the worst aspects of Communism and Liberal Socialism within a so called controlled free market. In short do not seem to be following any sort of real joined up Policy at all

  15. Mark
    November 21, 2010

    I note from the most recent Public Sector Finances Statistical Bulletin for October, Table PSF3 that the tax receipts for income tax and CGT are 0.7% lower in the most recent three months than they were in the corresponding period a year ago. Since we actually have a limited economic rebound it is becoming increasingly evident that the tax regime is leading to a lower tax yield: the Laffer curve in action.

    On the other hand, VAT receipts are up 19.3% in the same comparison, although the increase in rate from 15% to 17.5% is only 16.67%.

    It is to be hoped that Lord Young’s efforts on deregulation will not be lost through Cameron’s concern for his personal image over substance.

  16. waramess
    November 21, 2010

    Well yes, the only way to cut the deficit is by raising tax and/or cutting government spending. The government promised us they could cut rather than raise taxes but then they also promisd us a referendum on Europe.

    The only way to increase investment is to cut taxes. The government now reckon they can do this on the cheap by getting Osboorne to target industries to whom he will offer incentives.

    No point in telling them this is not the way forward. They have the levers of power and are in no mood to listen. We, the rest of us, now have no influence and the prospect of finding it has been lost to the queue of MP’s that has formed seeking career advancement.

    Zero interest rates and more talk of money printing; all of this and much more we could have got by electing a socialist government.

    We might start watching the net migration figures because the one way out of this mess is emigration.

  17. lola
    November 21, 2010

    VAT is a lethal tax. Consider. I run a fee charging retail financial advice business. Currently I can split my time between non vatable supplies (arranging insurance, arranging deals in unit trusts etc etc) and vatable supplies (giving ‘advice’). If either (a) the FSA forces us all to be fee charging then I will have to add 20% to my invoices. So a fee which is by definition a charge against my client’s earnings and capital will go up by one fifth. Who pays? This is clearly a destruction of capital – a conversion form capital to (government) spending. If try absorb it it comes of my bottom line. My children have to go without shoes.

    Vat (and income tax come to that) are appalling taxes, beacuse they take money and wealth out of the two wealth creating factors of production – labour and capital. Better to tax the other factor of production, which if you recall Ricardo’s law of rent, all profits from the other factors return……….land. Increase land taxes and scrap taxes on capital and labour.

  18. libertarian
    November 21, 2010


    One problem with the rise in vat is that businesses such as mine, which are internet service businesses, become uncompetitive with similar offerings from countries which charge no vat/sales tax.

    I’m afraid that I feel that any further raises of any tax is going to make us even more uncompetitive. What with the delayed introduction in the rise in employers NI , the new compulsory pension scheme and a rise in UBR all due over the next year or so the government so far have talked a good game about the private sector growth but have done absolutely nothing to encourage it.

  19. Alan Wheatley
    November 21, 2010

    I am pleased to say that here we have a good, worked example of “government by argument”, in contrast to “government by spin” which is to be deprecated. Of course, JR is not actually in the government, but I hope everyone gets my point.

  20. Bob
    November 21, 2010

    In it not time to stop raising taxes and start cutting expenses?

    Is it true that public sector pensions are set to become the single biggest item of public expenditure?

  21. michael read
    November 21, 2010

    Call Ireland’s cut-price corporation tax what it is: a short-term beggar-thy-neighbour scam.

    Any bloody fool can do it and in the long-run the measurel is counter-productive. Big Bucks Corp parks its HQ nominally in Eire but none of the key vertical stuff like r & d, manufacturing and even HQ staff, follows. You get a brass plate which is unscrewed at the first whiff of a better offer just around the corner.

    If Ireland is forced to bring its tax regime up to EU levels, as may be the price of the bail-out, then the would-be Celtic tiger will be instantly transformed into dead gerbil.

  22. Lindsay McDougall
    November 21, 2010

    We are probably going to have to do something about income tax. If the coalition is still commited to the LibDem policy of taking everyone wih an income of less than ¬£10,000 out of tax, the standard rate will have to go up to make good the revenue loss. The top rate of 50% is already too high. If you add in NI at 11%, that takes it to 61%, which is too much. And child benefit is now means tested. Try doing the maths for a family with one breadwinner earning ¬£80,000 and supporting six people, with a mortgage of ¬£100,000 at 5%. That’s an old fashioned professional family. Not much fun, is it?

  23. Terence CLARK
    November 21, 2010

    When I “did” economics, is was simply called “The Law of Diminishing Returns”, or is that now out of fashion?

  24. APL
    November 21, 2010

    JR: “VAT is probably the least bad tax option.”

    Huh!! Since VAT is the EU tax, would you kindly let us know the following?

    1. What is the current revenue raised by VAT?
    2. How much extra revenue is expected to be raised by the new rate of VAT
    3. How much of the extra revenue will be paid to the EU?
    4. How much is acknowledged to have been defrauded by scams such as VAT carousel, don’t forget to include the huge fraud related to so called carbon credit trading.

    The fact that VAT was but a part of the price agreed by Edward Heath that scoundrel masquerading as a tory*, that we the tax paying public should pay to join the stinking orginisation, why isn’t a straight sales tax levied by Westminster, a better – that is more transparent and less complicated** means of raising revenue?

    *It seems to have be de rigueur these days for the Tories to elect a Socialists or Liberal to lead the party, one wonders what the point of voting Tory might be? Perhaps party members are of a particularly masochistic bent which may account for it.

    **Given that a sales tax would make the VAT ‘carousel fraud” obsolete we could actually increase revenue by the simple expedient of abolishing VAT.

  25. Iain Gill
    November 21, 2010

    why dont we tax work visa holders at least as much as Brits ? surely in these troubled times we can ill afford to let them have the benefits of the NHS and our state schools and yet be taxed significantly less than the native workers they are displacing?

    1. simon
      November 22, 2010

      Because the political classes have decided that Western taxpayers should subsidise trans-national-corporations in order to destroy the homegrown competition .

      Unfortunately we are not going to get an answer to your question from our elected representatives .

      One can only hope that the forthcoming extension to this scheme in the EU-India “free trade” agreement leads to massive (protests).

      (time to expose the politicians for this policy ed).

  26. English Pensioner
    November 21, 2010

    No doubt the increase in VAT will boost retail trade in December. We’ve decided to bring forward some of our proposed new items for the home which we’ve been delaying until now – a new TV, a video recorder, a replacement home computer and a microwave oven. No doubt many others will do the same and there will be a Christmas boom in retail sales followed by a slump in the new year. Also, there is little incentive to save and buy later with the poor interest rates and the increasing r.p.i. So I’ll be taking out some of my National Savings and wondering how many others will be doing the same, which presumably won’t please the treasury.

  27. libertarian
    November 21, 2010

    @michael read

    You can’t be serious. If you are then you clearly have a) never had a business of your own b) run a business c) do not understand the first principles of enterprise and trade.

    Even if everything you said was accurate ( it isn’t) Ireland would still be vastly better off with low corporation tax. I guess no one told you that corporation tax is only paid out on profits which means that all the money would go through the Irish economy first. That even if it was only a book keeping exercise at a corporate HQ i guess you think all those 1,000’s of jobs are worthless?

    Trade and enterprise is one of the simplest mechanisms that exist so it astounds me that about 85% of people just don’t have a clue how it actually works

    1. p soakwl
      November 21, 2010

      I am increasingly coming to the conclusion that 85% of people don’t know how anything works!

  28. C H Ingoldby
    November 21, 2010

    Mr Redwood, do you believe that this government truly would like to see lower taxes?

    I find it hard to believe that in its heart of hearts, this government has the true Conservative instincts of low taxes, sound currency, strong defence and small State. I hope i am wrong but i repeatedly get the impression that the leadership is more comfortable dealing with Eurocrats and Liberal Democrats than their own members.

  29. michael read
    November 21, 2010


    So your big idea is to create an economy like the Cayman Islands, is it? Obviously we have a difference of opinion here about what is an enterprise. Rolls-Royce Aerospace is simply a proper enterprise but your definition, which seems to be any old commodity box-shifter, well, it doesn’t quite cut it IMO.

    More to the point, in fact the point, you simply can’t easily put RR Aerospace into containers and unpack it in a car-park in Galway.

    Still, though the target is tempting, not least because of your daft moniker – self-marketing for the dumb – I’ll pass on your solipsistic fantasy.

    I strongly suspect you’ve never had to worry about trade and enterprise in your life. No one in business could possibly construct your last sentence with a straight face or else, a strong sense of surrealist irony.

    1. lola
      November 22, 2010

      “More to the point, in fact the point, you simply can‚Äôt easily put RR Aerospace into containers and unpack it in a car-park in Galway. “

      Oooo yes you can. Did you watch the Chinese stripping out all the machine tools from the Rover factory? ‘Capital’ is mobile – which is a Good Thing as it keeps everybody competitive and governments honest (ish).

      1. APL
        November 23, 2010

        Lola: “Oooo yes you can.”

        Agreed, of course you can.

        I cite Motorola as an example of one of the so called silicone glen manufacturers that simply closed up their manufacturing facility in Scotland and moved it lock stock and barrel to Eastern Europe. The whole process was announced done and dusted in a matter of six months.

        And it highlights the error of putting all your eggs in one (multinational) basket, we need home grown indiginous industry that will stay loyal to our country. For that to happen we need a simpler, low tax regieme. If the Tories won’t deliver it, who will?

    2. libertarian
      November 22, 2010

      Dear Michael.

      Well I obviously hit a nerve as all the stuff about RR is absolutely nothing to do with what I said. In fact nothing in your reply relates to what I said.

      Sadly for you I am a very successful businessman of over 20 years standing with 5 current businesses all in profit.

      ps I think your moniker is daft too, as you obviously cant

  30. Captain Peacock
    November 22, 2010

    How long I wonder till the EU set the VAT rate.
    I notice this is passing under the radar about the new EU Police force.
    “When its Euro police officers are operating in the UK they have diplomatic immunity and cannot be touched by the British judiciary.”
    By agreeing this how it shows how little our MPs care for our rights.

  31. grahams
    November 22, 2010

    You are probably right that a VAT rise is the least damaging option but then it always seems to be the easy option. Every Conservative or Conservative led government in the past 40 years has raised VAT: variously to join the Common Market, to finance income tax cuts, to finance abolition of the poll tax and now to cut the deficit. Unless I am mistaken, no Conservative government has ever cut VAT rates. This is not a record to be proud of.

    1. lola
      November 22, 2010

      VAT is an evil option. It’s a stealth tax on business. How come politicains argue that raising taxes on booze and fags is a ‘Good Thig’ because it will put the price up and discourage these habits whereas when putting up VAT, that is increasing the price, they say that this will not have an impact on sales? Clowns.

      1. APL
        November 23, 2010

        Lola: “Clowns”

        Self serving Clowns.

  32. Str0ngholdBarricades
    November 22, 2010

    Surely parts of your “low” tax arguement are bring done by the Lib Dem approach to personal taxation levels.

    By raising personal rates, no one has yet explained the effect upon one of Brown’s tax roundabouts…Tax Credits…or the amount of time it is going to take some desk jockey to work out the new raes

  33. Glenn Vaughan
    November 22, 2010

    There are no sound arguments for imposing VAT at any rate and the tax should be abolished forthwith. Calls for tax harmonisation by other EU member states should be ignored.

    Those wanting current Tory MPs to behave like true conservatives can learn from watching The Rise, Fall and the Future of Conservatism broadcast by the Fox News Corporation.

  34. Robin Smith
    November 23, 2010

    Dear Mr Redwood,

    When you think about it carefully, VAT is protectionism. For monopoly corporation within the private state. The big guys have more staying power and more buying power so can survive longer. Not because they are better or more efficient. But because they get some enormous welfare state granted privileges. Welfare scroungers. VAT is one such thing. The other is the ability to accumulate enormous capital stock purchased with land rents in a way that is out or reach of the real entrepreneurs. Socialists ignorantly call this capitalism. Capitalists selfishly call this a “free market”. But it is actually public monopoly, giving private monopoly welfare. Its really monopolism. VAT is a great boon to a monopolist.

    <If we need primary evidence we can find it here directly from the Wokingham Town Council Planning & transport Committee:

    <And from the high street:


    Robin Smith

    Real Reform

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